Companies Act Section 398

Companies Act, Section 394: Provisions Regarding Electronic Filing, Maintenance, Inspection, and Communication

Section 394 of the Companies Act, 2013 empowers the Central Government to modernize and digitize corporate compliance by enabling the electronic filing, storage, authentication, and inspection of documents and communications required under the Act. 

This provision supports the move towards e-governance and aligns with the principles of the Information Technology Act, 2000.

1. Authority to Mandate Electronic Processes

Despite anything that may be stated differently elsewhere in the Act, and while complementing Section 6 of the Information Technology Act, 2000 (which gives legal validity to electronic records and digital signatures), the Central Government is given the power to introduce rules that require the use of electronic systems for various statutory filings, communications, and records.

a) Electronic Filing of Documents

Certain statutory documents required to be filed or delivered under the Act or the rules made thereunder such as:

All applications, balance sheets, prospectuses, statutory returns, declarations, the Memorandum of Association (MOA), the Articles of Association (AOA), particulars of charges, and any other prescribed particulars or documents shall be submitted in electronic format and authenticated using the prescribed digital method, such as digital signatures.

b) Electronic Service of Notices and Communications

Documents that are required to be served or delivered under the Act, including notices, intimations, or other official communications, may also be:

Provided electronically, and duly authenticated in a prescribed electronic manner.

c) Electronic Maintenance and Registration of Records

Documents and filings submitted under the Act, such as:

Registers, returns, MOA & AOA, financial statements, particulars of charges, etc. shall be:

Maintained by the Registrar of Companies (ROC) in electronic form, and recorded, registered, or authenticated as per the prescribed electronic procedures.

d) Electronic Inspection Rights

Any person who is otherwise entitled to inspect documents under the Act, such as:

MOA, AOA, statutory registers, balance sheets or returns, indexes or other corporate filings shall also be allowed to inspect such records electronically in the manner prescribed by the rules.

e) Electronic Payment Systems

All legally payable amounts including:

Statutory fees, filing charges, or any other sums payable under the Act or rules, may be required to be paid through approved electronic payment modes.

f) Registrar’s Functions in Electronic Mode

The Registrar of Companies, in performance of his duties, may be required to carry out functions through electronic systems, including:

Registering changes in a company’s registered office, recording alterations to MOA or AOA, issuing certificates of incorporation or any other statutory certificate, registering documents and notices, receiving communications and maintaining records.

All such actions must follow the prescribed electronic authentication and processing method.

2. Power to Implement Through a Scheme

The Central Government may introduce a formal scheme via notification to operationalize the electronic processes mentioned above. 

This ensures that the transition to digital compliance can be planned, structured, and implemented gradually.